Stocks throughout the Pacific Rim are bouncing back on news that Chinese manufacturers are easing off the brakes as Beijing swings from tightening the economy toward stimulus.
The HSBC version of the purchasing manager's index (PMI) for China came in at 48.7 in December, well above the 47.7 level recorded in November but still below the 50-point base that indicates an industrial expansion.
Traders were pleased to get confirmation that the local economy has apparently slowed its deterioration and is near bottoming out.
New orders and output were somewhat stronger but still indicated a slowdown driven by a pullback in demand from overseas for Chinese products.
Input costs declined and employment in the sector was flat, taking pressure off manufacturers.
HSBC has argued that even at a PMI level around 48, Chinese industrial output can should increase at a rate of above 12% a year.
The official numbers from Beijing come out Sunday.
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